Icahn Enterprises (NASDAQ: IEP) stock price is falling apart as concerns about its dividend safety continues. It has crashed to $10, down by over 40% this year and by over 53% in the last 12 months. 

Most notably, IEP has dropped in the last four consecutive weeks and is down by over 73% from its highest point in 2023. This crash has brought its market cap from last year’s high of over $18 billion to $4 billion.

Perils of yield chasing

Icahn Enterprises is a good example of the perils of yield chasing as the company has a dividend yield of 38%, making it one of the biggest yielders in Wall Street.

A 38% yield means that a $10,000 invested in the company should pay about $3,800 in a year, if it remains constant. 

However, while this is a good return, investors are often exposed to a big risk, with default and bankruptcy being the biggest ones. As a result, what the stock gives you in dividends, it takes it back in the lagging stock performance. 

In Icahn’s case, the total return, which includes the stock price action and dividends, has dropped by over 41% in the last 12 months. In the same period, the S&P 500 index has jumped by over 22.4%

This happens because of how a dividend yield is calculated. It is calculated by dividing a company’s annual dividends per share and the stock price per share and then multiplying the result by 100%.

Why Carl Icahn’s company is imploding

The IEP stock price action brings the sad reality to one of the most prominent players in Wall Street. Born in 1936, he grew to become one of the top corporate raiders in the United States, especially after his takeover of Trans World Airlines, which filed for bankruptcy during his ownership.

Over time, he transformed from a corporate raider into a highly-feared activist investor, where he bought small stakes in companies and advocated for changes, including the firing of CEOs. Some of his most popular activist plays were with companies like Cheniere Energy, CVR Energy, and Xerox.

Most recently, however, Carl Icahn has been fighting to save his company, which owns stakes in several large companies in the US. Some of the top companies in the portfolio are CVR Energy, where he is the biggest shareholder, Southwest Gas, International Flavors & Fragrances, Bausch Health, Dana, JetBlue, SandRidge Energy, and American Electric Power.

Most of these companies are not doing well. Bausch Health, formerly known as Valeant Pharmaceuticals, has crashed by over 82% from its highest point in 2021 and is hovering near its all-time low.

CVR Energy shares have plunged by over 40% from their highest point this year while JetBlue has fallen by 74% from its 2021 highs. The company has come under pressure following its botched attempts to buy Spirit Airways.

Southwest Gas Holdings has also dropped by almost 10% from the year-to-date high. While International Flavors has bounced back this year, it remains 28% below the highest point in 2021.

Other companies in Carl Icahn’s portfolio like Caesars Entertainment and Centuri Holdings have all plunged. 

Carl Icahn’s debt and fine

The Icahn Enterprises stock price was doing relatively well until 2023 when Hindenburg Research published a scathing attack of the company. 

In the report, Hindenburg accused Icahn Enterprise for operating like a ponzi scheme. He also noted that Carl Icahn had borrowed substantial sums of money by using the IEP stock as collateral and failed to disclose them. 

The Securities and Exchange Commission (SEC) then started investigating the company, and this month, agreed to a $2 million settlement. Icahn also agreed to avoid future violations. 

Meanwhile, the soaring dividend yield means that investors worry that the Icahn Enterprises may be forced to sell stakes at a big loss or even file for bankruptcy. Looking at its balance sheet, we see that the company has total liabilities of over $12.6 billion against total assets of $17 billion. 

Its liabilities include $6.5 billion in long-term debt and $598 million in capital leases. Most notably, the company faces some heavy maturities in the coming years that will need to be paid. It has $6.37% senior unsecured notes worth $749 million maturing in 2025, $1.2 billion in 2026, and $1.4 billion in 2027. The next maturities will be $708 million and $698 million in the next two years. 

IEP stock technicals

Worse, the Icahn stock price has some weak technicals. It has crashed from last year’s high of $38 to just $10. Most recently, the stock has plunged below the key support level at $12.67, its lowest swing in December last year. 

IEP has remained below the 50-day and 100-day Exponential Moving Averages (EMA), meaning that bears are in control. Therefore, the path of the least resistance for the stock is downwards, with the next point to watch being at $8.

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US stock futures, cryptocurrencies, and crude oil reacted to the latest Donald Trump and Kamala Harris debate. 

Kamala Harris victory odds rise

Futures tied to the Dow Jones dropped by 0.35% while those linked to the S&P 500 and Nasdaq 100 indices retreated by 0.40% and 0.46%. The Dow fell by 0.23% on Tuesday while the other two rose by 0.45% and 0.85% ahead of the debate.

Crude oil, on the other hand, stabilised a bit, with Brent, rising by 0.60% to $69.6 and the West Texas Intermediate (WTI) rising by 0.67% to $66.20. Still, crude has been in a strong bearish trend, and sits near the lowest point in over 16 months. The two benchmarks have dropped by over 25% from the highest point this year. 

Cryptocurrency prices were fairly muted as the debate went on. Bitcoin held steady at $56,800 while Ethereum fell slightly to $2,347. Binance Coin (BNB) and Solana (SOL) dropped to $513 and $133, respectively. The total market cap of all cryptocurrencies dropped by 0.9% to $2.09.

This performance is likely a sign that Kamala Harris won the debate against Donald Trump. A good example of this is what happened in the crypto industry. The Kamala Horris (KAMA) token rose by 3.1% to $0.0094, giving it a market cap of over $9.3 million. It has risen by over 10% in the last seven days. 

On the other hand, MAGA Hat, dropped by 6.8% while Doland Tremp and Super Trump fell by over 6% as the debate went on. 

Most important, Harris odds of beating Trump improved on Polymarket. Data from the website shows that the two were tied at 4.9%. Before the debate, Trump had a bigger margin of 54% compared to Harris 47%. The poll has over $859 million in assets.

Another Polymarket poll with over $755k in assets predicted that Harris would be the favourite to win after the debate with a 54% chance. 

What is clear, however, is that the presidential race will be close as recent polls have shown. A closely-watched New York Times and Sienna poll showed that Trump had a one-point lead nationally while they were virtually tied in most swing states.

Trump vs Harris on the economy

Therefore, cryptocurrency prices retreated because Donald Trump is the favorite candidate for the crypto community. In recent statements, he has sounded extremely supportive of the crypto industry. He even holds cryptocurrencies worth over $5 million.

Harris, on the other hand, has little support, partly because she has not expressed support for the industry and is rumoured to nominate Gary Gensler as the Treasury secretary. Gensler is highly disliked by crypto participants for his legislation through prosecution.

Crude oil also stabilised because of her rising odds. Trump has expressed support for the fossil fuel industry, through his drill, baby, drill, policies. In reality, however, Harris and Biden have been relatively good for the industry as energy prices have remained at an elevated level during their presidency. Trump’s policies would lead to more supply, possibly hurting prices. 

Trump and Harris also highlighted their economic plans. Trump has vowed to impose substantial tariffs on countries like China in a bid to lower the trade deficit. This week, he said that he would impose tariffs on countries that abandon the US dollar. 

Harris has pledged to hike taxes on companies and fight price gouging, especially among retailers. 

Assets outlook after the election

The reality, however, is that most assets ignore the president in the long-term. For example, cryptocurrencies have done well during Joe Biden and Gary Gensler’s era. Bitcoin, which was trading at $35,000 when Biden was sworn in, rose to a record high of $73,800. Ethereum was also trading at $1,300 and moved to over $4,000 earlier this year. 

This price action happened even after Gary Gensler sued many companies in the industry like OpenSea, Coinbase, and Kraken. On the positive side, Gensler approved spot Bitcoin and Ethereum ETFs.

Most importantly, American stocks do well regardless of who is in the White House. Top indices like the Dow Jones, Nasdaq 100, and S&P 500 indices have touched a record high under most presidencies. 

It is also worth noting that most stocks that are expected to do well or fall during a presidency don’t always perform as expected. For example, solar energy companies, which were expected to boom during Biden’s presidency have underperformed the market. Some have even filed for bankruptcy.

VDE vs ICLN ETFs

On the other hand, crude oil companies like ExxonMobil and Chevron have done well under Biden. As shown above, the iShares Global Clean Energy ETF has dropped by over 48% under Biden as the Vanguard Energy ETF (VDE) has risen by 160% in the same period.

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In a landmark decision, the European Court of Justice (ECJ) has ruled that Ireland must receive €13 billion ($14.4 billion) in unpaid taxes from Apple.

The decision, which is final, marks a significant turn in a prolonged legal battle that Dublin had fought to avoid.

Irish government faces political and financial dilemmas

The ruling leaves Ireland in a politically awkward yet financially advantageous position. With a general election required by March next year, Irish lawmakers must now decide how best to allocate this substantial cash injection.

The unexpected windfall comes at a time when the country is already dealing with significant infrastructural issues and a housing crisis.

Aidan Regan, associate professor of political economy at University College Dublin, commented on the situation,

The Irish government is now confronted with domestic pressures and an upcoming election. They have been asserting that this €13 billion is not theirs, but now they must address how to use it effectively.

The Irish government, which had consistently argued against the repayment of the taxes, maintains that it does not offer preferential tax treatment to any companies.

A spokesperson for the Finance Ministry referred to the government’s written statement, highlighting that the case is now of “historical relevance only.”

The government is preparing to transfer the assets held in an escrow fund to Ireland following the ECJ’s decision.

Impact on Ireland’s reputation and tax policies

Ireland has long been known for its low corporate tax rates, which have attracted numerous multinational companies, including Apple.

The country’s position on the case was rooted in concerns that enforcing the tax repayment could undermine its attractiveness as a business hub.

The ECJ’s ruling confirmed the European Commission’s 2016 decision that Ireland had granted Apple “unlawful aid” and required the recovery of the funds.

This decision comes at a time when Ireland is already experiencing a budget surplus, partly due to strong corporate tax receipts.

Robert Dever, a tax partner at Pinsent Masons, noted,

While this decision is financially beneficial for Ireland, it challenges the government’s long-standing stance that it does not provide preferential tax treatment. The ruling may impact Ireland’s international reputation, although recent changes to the tax code may mitigate some of this damage.

The process of transferring the funds from the escrow account to Ireland is expected to take several months to complete.

Global implications and calls for tax reform

The ruling has sparked discussions about the need for global tax reform. Alex Cobham, CEO of the Tax Justice Network, welcomed the decision but emphasised the broader issue of inadequate international tax rules.

“This ruling highlights the failure of current tax regulations to protect countries’ rights to tax economic activity within their jurisdictions,” Cobham stated.

Chiara Putaturo, EU tax expert at Oxfam, echoed similar sentiments, calling for comprehensive reform. Putaturo said,

This ruling exposes the problematic relationship between EU tax havens and multinationals. It should be a catalyst for closing all tax loopholes and ensuring that revenue is used for public services and combating climate change.

The ECJ’s decision underscores the ongoing challenges in international tax law and the need for continued reform to address corporate tax avoidance and ensure fair taxation.

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Stanley Druckenmiller, the former money manager for George Soros, has one of the best track records in Wall Street. He has rarely had a negative year and has become a billionaire with a net worth of over $6.9 billion, according to Forbes and $9.9 billion, according to Bloomberg.

At Duquesne Capital, he averaged annual returns of over 30% until he closed it in 2010 and returned funds to clients. Today, he still runs Duquesne but as a family office.

Data by Whale Wisdom places his total assets in the fund at about $3 billion. So, here are some of the best stocks owned by Druckenmiller.

Kinder Morgan | KMI

Kinder Morgan is one of the biggest players in the energy industry in the United States, but unlike ExxonMobil, Chevron, and Marathon, it is not a household name.

That’s because the company operates as a Master Limited Partnership (MLP), where it gathers, transports, and processes crude oil and natural gas. It owns over 79,000 miles of pipelines and 139 terminals.

Kinder Morgan stock has jumped by over 26% in the last 12 months, giving it a market cap of over $46 billion. It has moved to an all-time high even as the price of crude oil and natural gas has dropped. 

This performance is because, as a transporter, the company makes money in transport contracts. This also explains why other MLP companies like Enterprise Product Partners and Williams have done well this year.

The most recent financial results showed that Kinder Morgan’s revenue rose to over $3.57 billion in the second quarter from $3.46 billion a year earlier while its net profit fell slightly to over $575 million. Stan Druckenmiller owns 6.75 million Kinder Morgan shares worth over $134 million.

Teck Resources | TECK

Stan Druckenmiller owns over 1.45 million shares in Teck Resources, one of the biggest mining companies in Canada.

Teck is a top copper producer, and most recently, it sold its coal business to Glencore, one of the biggest mining firms globally.

Teck is a highly-beloved mining company whose stock has risen by 140% in the last five years, giving it a market cap of over $22 billion. 

It is seen as a good investment for two main reasons. First, it owns vast copper resources, which will become highly valuable as demand continues rising. Most analysts believe that copper will remain in a supply deficit over time as countries change their energy mix. 

Second, Teck Resources is often seen as a good acquisition target, especially if the family that controls it are open to a sale. Glencore attempted to buy it in 2023 and failed and there are rumours that Rio Tinto will place a bid.

Philip Morris | PM

Druckenmiller owns 889k shares in Philip Morris International worth over $90 million. Philip Morris and other tobacco companies like Altria and British American Tobacco have done well this year, with most of them outperforming the broader market.

Philip Morris shares have jumped by over 34% in the last 12 months and by 34.75% this year alone. It has a dividend yield of about 4%.

This growth is mostly because of its strong dividend of about 4% and the fact that it has been undervalued for a while. The company has a forward P/E ratio of 19, lower than the S&P 500 index average 21.

Philip Morris’ business has been doing well, with the most recent results showing that its revenue rose to over $9.46 billion in the second quarter from $8.9 billion a year earlier. Its quarterly profit also jumped to over $2.4 billion. 

Coherent Corp | COHR

Coherent Corp, a company worth over $10 billion, is another big part of Druckenmiller’s portfolio. He owns over 3.59 million shares worth over $260 million, a trade that has been highly profitable since the stock has jumped by over 115% in the last 12 months. 

Coherent is up by 62% this year because it is seen as a top artificial intelligence company. It manufactures communication components like pump lasers, photodetectors, integrated circuits, and optical materials. 

Coherent’s revenue rose from $1.2 billion in the second quarter of 2023 to over $1.3 billion last quarter. It also narrowed its net loss to $47 million from $178 million. 

Seagate Technology | STX

Seagate Technology is another company in the Duquesne Family Office portfolio. It is a leading American company that manufactures data storage solutions that are found in most computers.

Seagate, like Coherent, is seen as a good artificial intelligence play, which explains why the stock has jumped by about 60% in the last 12 months and 85% in the past five years. This rally has brought its market cap to over $20 billion. Seagate Technologies is a relatively cheap company with a price-to-earnings ratio of 15. 

The other top names in Stanley Druckenmiller’s portfolio are Microsoft, Woodward, Zoominfo, Flutter Entertainment, and Mercadolibre.

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Tata Motors stock has done well this year as it outperformed most automakers. The stock soared to a record high of ₹1,180 in July, up by over 1,800% from its lowest point in 2020. It has risen by over 31% this year, outperforming the companies like Toyota, Ford, General Motors, Stellantis,  and Volkswagen, which have dropped this year.

Tata Motors strong demand 

Tata Motors strong performance has made it the 12th biggest automaker in the world in terms of market cap. It has become a bigger company than the likes of Stellantis, Hyundai, Ford, and Suzuki. 

This growth happened because the company has had strong demand for its commercial and passenger vehicles. The most recent data shows that the number of registered vehicles in India rose to over 326 million in 2020 from less than 110 million in 2008. The number has likely grown since then.

India’s growth is important for Tata Motors because it is its biggest market. Other large Indian automakers like Mahindra & Mahindra and Maruti Suzuki have all jumped for the same reason.

Most notably, unlike its Western peers like VW, BMW, Ford, and GM, Tata Motors has mostly focused on selling Internal Combustion Engine (ICE) vehicles. While Tata has invested in electrifying its business, most of its energy has remained on the ICE segment.

Most traditional companies that pivoted to EVs have had to scale down their operations in the past few months because of the waning demand and soaring losses.

Tata Motors is also highly diversified. It sells commercial vehicles like trucks, passenger vehicles, and luxury ones through its Jaguar Land Rover (JLR) brand.

Tata financial results

The most recent results by Tata Motors and Jaguar Land Rover were strong. Its total revenue rose bu 5.7% to ₹108k crore or $13 billion while its EBITDA was over ₹15.6k crores. 

This growth happened as the company increased the number of vehicles it sold more vehicles than it did in the same quarter in 2023. It sold 330.3k units, a big increase from the 322.2k it sold in the same period in 2023.

Tata Motors EBITDA remained stagnant at ₹14.4k crore while its profit before tax was ₹8.8k crore. 

These numbers demonstrated that the company was doing modestly well in a tough market for vehicles. Jaguar Land Rover sold 97,755 vehicles in the quarter, generating over £7.2 billion in revenue and a profit of £693 million. 

As a result, JLR received credit upgrades from S&P Global and Moody’s, which is a positive sign that will result in lower borrowing costs. 

Growth and valuation concerns

Still, there are concerns about Tata Motors valuation and growth prospects, which explains why the stock has moved into a correction after falling by over 15% from its highest point this year.

Some of the sell-off happened on Wednesday when analysts at UBS downgraded the company, citing the substantial discounts being offered by Jaguar Land Rover. UBS maintained its sell rating on the stock with a target of ₹825, down by over 16% from the current level. 

UBS is one of the most bearish analysts covering Tata Motors. Jefferies, a leading Wall Street company, has a target of ₹1,330, meaning that they expect it to jump by over 30% from the current level. 

Nomura, however, has a buy rating on Tata Motors stock and recently upgraded the stock’s outlook from ₹1,294 to ₹1,303. Altogether the average stock target for Tata Motors shares is ₹1,176, up by 20% from the current level. 

A key concern about Tata Motors is that it is trading at a higher valuation compared to its global peers. It trades at a forward P/E ratio of 15.8 and a 2026 multiple of 12.7. In contrast, most global automakers have P/E multiples of less than 5. Ford has a 2025 P/E ratio of 5.6 while GM has a multiple of 4.76. 

Therefore, Tata Motors will need to continue growing to justify a higher valuation than its global peers. The challenge, therefore, is where this growth will come now that there are signs that the Indian economy was slowing.

Tata Motors share price analysis

The daily chart shows that the Tata Motors stock price peaked at ₹1,180 in July and has now moved into a bear market after falling by over 15%. It has dropped to its lowest point since July 2023. 

The stock has also moved below the 50-day and 100-day moving averages and the key support level at ₹1,057, its highest point in March. Also, the MACD and the Relative Strength Index (RSI) have pointed downwards.

Therefore, the stock will likely continue falling as sellers target the next key support level at ₹900, down by 9% from its current level.

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